Cash purchase - Paying solicitor

Tixy

Quick question for a friend.

Friend is buying a house in cash, no mortgage. Some of the cash is coming from her relatives (it is a gift).

Could the relative pay direct to the solicitor, or do they need to pay in to her account and then she pays the solicitor?

Will relative be required to provide evidence of where funds came from? e.g. show that it has been transferred from their savings account to their current account?

Thanks

Credit-Crunched

Tixy wrote: »

Quick question for a friend.

Friend is buying a house in cash, no mortgage. Some of the cash is coming from her relatives (it is a gift).

Could the relative pay direct to the solicitor, or do they need to pay in to her account and then she pays the solicitor?

Will relative be required to provide evidence of where funds came from? e.g. show that it has been transferred from their savings account to their current account?

Thanks

Yes, that is possible, however, I warn you that Solicitors are all over cash purchases, especially from 3rd parties. There is anti money laundering forms they will have to complete, and even then, if the solicitor is not happy of the source of funds they can refuse to act on behalf of the client.

stator

Yes make sure the solicitor is aware of where the money is coming from so you can sort out everything they ask for and not get surprised at the last minute

G_M

They don't care where the cash comes from so long as it is not drugs/people-trafficing money etc.

Just as they'll want some background on the source of your own cash, they'll want the same rom your relative.

silvercar

Far easier to move the money into your account and pay from there. Otherwise the solicitors may well ask for ID checks and copy bank statements from the relative.

Bettie

Tixy wrote: »

Quick question for a friend.

Friend is buying a house in cash, no mortgage. Some of the cash is coming from her relatives (it is a gift).

Could the relative pay direct to the solicitor, or do they need to pay in to her account and then she pays the solicitor?

Will relative be required to provide evidence of where funds came from? e.g. show that it has been transferred from their savings account to their current account?

Thanks

I put money into my daughters account and the solicitor asked how she got the money. She said her Mum had given it her as a gift. He said I would have to sign a form but I never received it and the sale went ahead.

Credit-Crunched

G_M wrote: »

They don't care where the cash comes from so long as it is not drugs/people-trafficing money etc.

Just as they'll want some background on the source of your own cash, they'll want the same rom your relative.

I think you will care where the money comes from, AML is a practising solicitors primary concern in a cash purchase.

The SRA are really stressing to all that this is a major area of concern.

I know first hand that the some solicitors have requested 3 years bank statements showing excess income to build up the cash reserves.

davidmcn

silvercar wrote: »

Far easier to move the money into your account and pay from there. Otherwise the solicitors may well ask for ID checks and copy bank statements from the relative.

If the solicitor is doing their job properly they'll want to know where the money came from, and you'll end up having to provide the same evidence from the relative.

silvercar

davidmcn wrote: »

If the solicitor is doing their job properly they'll want to know where the money came from, and you'll end up having to provide the same evidence from the relative.

Hmm. In my experience comments like "built up over X years including monthly savings, bonus payments, various gifts over the last 10 years, small inheritance" together with a bank statement that showed that (a) the money was in my name and (b) it was there 3 months ago" was sufficient. But I accept that different solicitors may take a different view.

Credit-Crunched

silvercar wrote: »

Hmm. In my experience comments like "built up over X years including monthly savings, bonus payments, various gifts over the last 10 years, small inheritance" together with a bank statement that showed that (a) the money was in my name and (b) it was there 3 months ago" was sufficient. But I accept that different solicitors may take a different view.

This approach is the norm for a deposit, however, on a full house purchase, the risk is greater. The solicitors are the one and only entity that is dealing with the purchase. SO they are generally much more aware of the risk of money laundering.

When a client has a deposit provided by a third party, the solicitors are merely an add on to the process with the mortgagor running credit check, and assessing the applicants, and in turn taking some of the AML responsibility.

I hope this makes sense!

davidmcn

silvercar wrote: »

Hmm. In my experience comments like "built up over X years including monthly savings, bonus payments, various gifts over the last 10 years, small inheritance" together with a bank statement that showed that (a) the money was in my name and (b) it was there 3 months ago" was sufficient. But I accept that different solicitors may take a different view.

It might, but we don't know that the OP's friend has 3 months to spare.